Needham maintains Buy on OncoCyte, price target at $4.25

Published 13/05/2025, 12:32
Needham maintains Buy on OncoCyte, price target at $4.25

On Tuesday, Needham reaffirmed its Buy rating on OncoCyte Corp (NASDAQ:OCX) with a consistent price target of $4.25. Currently trading at $2.81, the stock has significant upside potential according to analyst consensus, with targets ranging from $4.00 to $5.00. InvestingPro analysis reveals several key insights about the company’s prospects, with 7 additional ProTips available to subscribers. The company is advancing with the introduction of its GraftAssureIQ, which is being co-marketed with Bio-Rad. The product is gaining traction as OncoCyte continues to partner with transplant centers in anticipation of its GraftAssureDx Kidney kitted test, which is expected to launch in the first half of 2026 pending FDA approval.

OncoCyte has entered Phase 3, which involves a validation trial with approximately 150 patients. The company’s goal is to collaborate with at least 20 transplant centers in the United States and Germany by the end of 2025, with 10 centers already on board as of the first quarter of 2025. This expansion is seen as a significant step in the company’s efforts to advance its diagnostic testing solutions.

In terms of financial health, OncoCyte is actively managing its quarterly cash burn, which management anticipates will remain around $6 million throughout 2025. The company concluded the first quarter of 2025 with approximately $32.7 million in pro forma cash. This financial position was bolstered by a successful fundraising effort in February 2025, which added roughly $28.7 million to its reserves.

The company’s progress and strategic partnerships are seen as positive indicators of its commitment to bringing new diagnostic solutions to the market, particularly in the transplant diagnostics space. The maintenance of the Buy rating and price target by Needham reflects confidence in OncoCyte’s direction and potential for growth as it continues to navigate the regulatory landscape and expand its market presence. With a market capitalization of $80.36 million and an overall Financial Health Score rated as "FAIR" by InvestingPro, investors seeking deeper insights can access a comprehensive Pro Research Report, which provides detailed analysis of OCX among 1,400+ US equities.

In other recent news, OncoCyte Corp reported its first-quarter 2025 earnings, revealing that its pharma services revenue reached $2.1 million, surpassing expectations due to a substantial late-quarter order. The company maintains a strong cash position of nearly $33 million, although it recorded a negative free cash flow of $6.2 million, aligning with its quarterly target. OncoCyte is focusing on the commercialization of its transplant rejection testing market, with plans to submit for FDA approval by the end of 2024 and anticipated approval in early 2026. The company is also developing its oncology pipeline, with DetermaIO showing promise in the drug rescue category. Despite positive revenue results, the company’s stock experienced a decline, possibly reflecting broader market sentiments or investor concerns. Analysts from firms such as BTIG have shown interest in OncoCyte’s potential oncology partnerships and future revenue opportunities. The company is also considering a corporate name change to better reflect its strategic direction.

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